ESPN Hooks Texas Longhorns Network

1/24/2011 12:01 AM Eastern

By: By Mike Reynolds

Soon the eyes of Texas will be upon ESPN’saffiliate team.

There will also be other interested observers throughoutthe media and distribution communities, as the sports giantannounced last week that it will kick off a network dedicatedto the University of Texas next September.

The 24-hour, still-unnamed service will be located inAustin, the result of a 20-year, $300 million agreementwith the university, the programmer and multimediarights-holder IMG College, which negotiatedthe deal for the school.

The Texas network — profferingone live football game, encores ofother Longhorn gridiron contests,basketball, other sports and extensiveshoulder fare, as well as somecultural, arts and academic programming— will be the first devotedentirely to one school.

IMG GETS AD SALES

ESPN will supply production — valuedby Sports Business Journal at $400million over the life of the contract —of more than 200 events per year. IMGwill lead the ad-sales effort.

The university reportedly will receive$247.5 million, while IMG gains$52.5 million as recompense for themultimedia rights it held.

ESPN senior vice president of collegesports Burke Magnus said ESPNhas held preliminary talks with potentialaffiliates.

“This is not a surprise,” he said.“We’ve let this be known. Officialtalks will begin shortly as Sean’sgroup takes it out,” referring to executive vice president ofsales and marketing Sean Bratches.

Magnus said there would be different pricing structures,which he declined to specify, based on location.

University of Texas president William Powers Jr. said hebelieves the network would be included on basic cable inTexas, Oklahoma and perhaps in parts of Louisiana, andcould be offered as “a premium, perhaps part of a sportspackage or as a stand-alone channel” elsewhere.

The Big Ten Network, a joint venture of that conferenceand Fox Cable Networks, charges one level ofpricing for the states within the conference footprintand far less for those in other areas.

ESPN research indicated that 40% of the university’salumni live outside of the great state of Texas.

The first stop for ESPN’s affiliate team, perhaps with yellowroses in hand, figures to be Time Warner Cable, thepredominant operator in a state that counts some 8 millioncable homes and is the provider on campus and in Austin.

“We have had a long relationship with the University ofTexas and are big Longhorn fans. We also have a great relationshipwith ESPN,” the cable operator said in a statement.“We look forward to exploring our opportunities inTexas with both of them.”

For distributors fearing a repeat of the proliferation ofpro sports teams establishing their own expensive regionalsports networks, Magnus downplayed the notion of thisserving as a model for ESPN to start channels with otherschools.

“Texas is our focus for the short-term. There are only alimited number of schools with the size, athletic successand scope of audience,” said Magnus, who noted that theTexas population also makes for “a significant businessopportunity.”

Most universities are constricted in pursuing such networkopportunities, because of existing deals.

“What are you talking about? Notre Dame? USC? Florida[whose rights are controlled by IMG]?” said one networkmedia executive. “But what’s ESPN’s end game? If thewhole college conference landscape blows up, they’re sittingthere with this network as a template and perhaps ina position to gain rights to more football games.”

SUITORS FOR SOONERS?

One school that is pursuing its own network is Texas’s regionalrival, Oklahoma University.

Sources indicate OU might be interestedin working with Fox Sports,which was said to have offered between$3 million to $5 million in annualrights to Texas, before beingtrumped by ESPN’s far more lucrativebid.

Other observers believe OU, whichdid not return calls for this story,could bypass a third party entirelyand work directly with Cox Communications,the predominant cable operatorin Oklahoma, perhaps in somesort of revenue-sharing arrangement.

A Cox spokesman said: “Cox’sgeneral policy is that we do not talkabout specific programmers or programmingopportunities in the media.However, we’re always opento considering opportunities thatmeet reasonable business criteriaand satisfy customer demand.”

ESPN also is working on a companion broadband servicefor the UT network.

Magnus said brand marketing and focus groups areworking on a network name that will include “some formof Texas, Longhorns or UT,” but won’t put the ESPN monikerfront and center.

ESPN production and technical personnel already havevisited the campus a few times scouting, for a studio location.“They’ve identified three to five different places; constructionwill begin soon,” Magnus said.

ESPN will dedicate somewhere between “50 to 75 employees”to the network, he added.